Connect with us

Real Estate

Mapped: The Growth in House Prices by Country

Published

on

The following slider shows both nominal and real housing prices by country. Use slider arrows to navigate.

Mapped: The Growth in House Prices by Country

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Global housing prices rose an average of 6% annually, between Q4 2021 and Q4 2022.

In real terms that take inflation into account, prices actually fell 2% for the first decline in 12 years. Despite a surge in interest rates and mortgage costs, housing markets were noticeably stable. Real prices remain 7% above pre-pandemic levels.

In this graphic, we show the change in residential property prices with data from the Bank for International Settlements (BIS).

The Growth in House Prices, Ranked

The following dataset from the BIS covers nominal and real house price growth across 58 countries and regions as of the fourth quarter of 2022:

Price Growth
Rank
Country /
Region
Nominal Year-over-Year
Change (%)
Real Year-over-Year
Change (%)
1๐Ÿ‡น๐Ÿ‡ท Tรผrkiye167.951.0
2๐Ÿ‡ท๐Ÿ‡ธ Serbia23.17.0
3๐Ÿ‡ท๐Ÿ‡บ Russia23.19.7
4๐Ÿ‡ฒ๐Ÿ‡ฐ North Macedonia20.61.0
5๐Ÿ‡ฎ๐Ÿ‡ธ Iceland20.39.9
6๐Ÿ‡ญ๐Ÿ‡ท Croatia17.33.6
7๐Ÿ‡ช๐Ÿ‡ช Estonia16.9-3.0
8๐Ÿ‡ฎ๐Ÿ‡ฑ Israel16.811.0
9๐Ÿ‡ญ๐Ÿ‡บ Hungary16.5-5.1
10๐Ÿ‡ฑ๐Ÿ‡น Lithuania16.0-5.5
11๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia15.44.2
12๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria13.4-3.2
13๐Ÿ‡ฌ๐Ÿ‡ท Greece12.23.7
14๐Ÿ‡ต๐Ÿ‡น Portugal11.31.3
15๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom10.0-0.7
16๐Ÿ‡ธ๐Ÿ‡ฐ Slovak Republic9.7-4.8
17
๐Ÿ‡ฆ๐Ÿ‡ช United Arab Emirates
9.62.9
18๐Ÿ‡ต๐Ÿ‡ฑ Poland9.3-6.9
19๐Ÿ‡ฑ๐Ÿ‡ป Latvia9.1-10.2
20๐Ÿ‡ธ๐Ÿ‡ฌ Singapore8.61.9
21๐Ÿ‡ฎ๐Ÿ‡ช Ireland8.6-0.2
22๐Ÿ‡จ๐Ÿ‡ฑ Chile8.2-3.0
23๐Ÿ‡ฏ๐Ÿ‡ต Japan7.93.9
24๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico7.9-0.1
25๐Ÿ‡ต๐Ÿ‡ญ Philippines7.7-0.2
26๐Ÿ‡บ๐Ÿ‡ธ United States7.10.0
27๐Ÿ‡จ๐Ÿ‡ฟ Czechia6.9-7.6
28๐Ÿ‡ท๐Ÿ‡ด Romania6.7-7.5
29๐Ÿ‡ฒ๐Ÿ‡น Malta6.3-0.7
30๐Ÿ‡จ๐Ÿ‡พ Cyprus6.3-2.9
31๐Ÿ‡จ๐Ÿ‡ด Colombia6.3-5.6
32๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg5.6-0.5
33๐Ÿ‡ช๐Ÿ‡ธ Spain5.5-1.1
34๐Ÿ‡จ๐Ÿ‡ญ Switzerland5.42.4
35๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands5.4-5.3
36๐Ÿ‡ฆ๐Ÿ‡น Austria5.2-4.8
37๐Ÿ‡ซ๐Ÿ‡ท France4.8-1.2
38๐Ÿ‡ง๐Ÿ‡ช Belgium4.7-5.7
39๐Ÿ‡น๐Ÿ‡ญ Thailand4.7-1.1
40๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa3.1-4.0
41๐Ÿ‡ฎ๐Ÿ‡ณ India2.8-3.1
42๐Ÿ‡ฎ๐Ÿ‡น Italy2.8-8.0
43๐Ÿ‡ณ๐Ÿ‡ด Norway2.6-3.8
44๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia2.0-3.4
45๐Ÿ‡ต๐Ÿ‡ช Peru1.5-6.3
46๐Ÿ‡ฒ๐Ÿ‡พ Malaysia1.2-2.6
47๐Ÿ‡ฐ๐Ÿ‡ท South Korea-0.1-5.0
48๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco-0.1-7.7
49๐Ÿ‡ง๐Ÿ‡ท Brazil-0.1-5.8
50๐Ÿ‡ซ๐Ÿ‡ฎ Finland-2.3-10.2
51๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark-2.4-10.6
52๐Ÿ‡ฆ๐Ÿ‡บ Australia-3.2-10.2
53๐Ÿ‡ฉ๐Ÿ‡ช Germany-3.6-12.1
54๐Ÿ‡ธ๐Ÿ‡ช Sweden-3.7-13.7
55๐Ÿ‡จ๐Ÿ‡ณ China-3.7-5.4
56๐Ÿ‡จ๐Ÿ‡ฆ Canada-3.8-9.8
57๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand-10.4-16.5
58๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR-13.5-15.1

Tรผrkiyeโ€™s property prices jumped the highest globally, at nearly 168% amid soaring inflation.

Real estate demand has increased alongside declining interest rates. The government drastically cut interest rates from 19% in late 2021 to 8.5% to support a weakening economy.

Many European countries saw some of the highest price growth in nominal terms. A strong labor market and low interest rates pushed up prices, even as mortgage rates broadly doubled across the continent. For real price growth, most countries were in negative territoryโ€”notably Sweden, Germany, and Denmark.

Nominal U.S. housing prices grew just over 7%, while real price growth halted to 0%. Prices have remained elevated given the stubbornly low supply of inventory. In fact, residential prices remain 45% above pre-pandemic levels.

How Do Interest Rates Impact Property Markets?

Global house prices boomed during the pandemic as central banks cut interest rates to prop up economies.

Now, rates have returned to levels last seen before the Global Financial Crisis. On average, rates have increased four percentage points in many major economies. Roughly three-quarters of the countries in the BIS dataset witnessed negative year-over-year real house price growth as of the fourth quarter of 2022.

Interest rates have a large impact on property prices. Cross-country evidence shows that for every one percentage point increase in real interest rates, the growth rate of housing prices tends to fall by about two percentage points.

When Will Housing Prices Fall?

The rise in U.S. interest rates has been counteracted by homeowners being reluctant to sell so they can keep their low mortgage rates. As a result, it is keeping inventory low and prices high. Homeowners canโ€™t sell and keep their low mortgage rates unless they meet strict conditions on a new property.

Additionally, several other factors impact price dynamics. Construction costs, income growth, labor shortages, and population growth all play a role.

With a strong labor market continuing through 2023, stable incomes may help stave off prices from falling. On the other hand, buyers with floating-rate mortgages face steeper costs and may be unable to afford new rates. This could increase housing supply in the market, potentially leading to lower prices.

Click for Comments

Markets

Ranked: 15 of the World’s Least Affordable Housing Markets

This map examines middle-income housing market affordability across eight major countries, highlighting some of the least affordable cities.

Published

on

Mapping housing market affordability and some of the least affordable cities

Ranked: 15 of the World’s Least Affordable Housing Markets

When considering where to live, big cities are attractive to people for a number of reasons, but affordability is usually not one of them.

This map, using data from Demographia, highlights the major cities ranked the worst for housing market affordability on a global basis.

Unaffordable Housing Markets

Demographiaโ€™s report looks at middle-income housing affordability in 94 cities in eight countries, many of which are known for having pricy housing markets:

  • ๐Ÿ‡ฆ๐Ÿ‡บ Australia
  • ๐Ÿ‡จ๐Ÿ‡ฆ Canada
  • ๐Ÿ‡จ๐Ÿ‡ณ China (Hong Kong)
  • ๐Ÿ‡ฎ๐Ÿ‡ช Ireland
  • ๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand
  • ๐Ÿ‡ธ๐Ÿ‡ฌ Singapore
  • ๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom
  • ๐Ÿ‡บ๐Ÿ‡ธ United States

For the 2023 report, it uses 2022 Q3 prices and income levels for evaluation, dividing the median house price by the gross median household income to find the median multiple for housing.

And for the first time in the history of Demographiaโ€™s reporting, not a single of the 94 cities scored below 3.0, the cutoff to be deemed โ€œaffordable.โ€ Hereโ€™s a closer look at the least affordable markets in 2023:

RankCityHousing Median Multiple
1๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong18.8
2๐Ÿ‡ฆ๐Ÿ‡บ Sydney13.3
3๐Ÿ‡จ๐Ÿ‡ฆ Vancouver12.0
4๐Ÿ‡บ๐Ÿ‡ธ Honolulu11.8
5๐Ÿ‡บ๐Ÿ‡ธ San Jose11.5
6๐Ÿ‡บ๐Ÿ‡ธ Los Angeles11.3
7๐Ÿ‡ณ๐Ÿ‡ฟ Auckland10.8
8๐Ÿ‡บ๐Ÿ‡ธ San Francisco10.7
9๐Ÿ‡ฆ๐Ÿ‡บ Melbourne9.9
10๐Ÿ‡จ๐Ÿ‡ฆ Toronto9.5
11๐Ÿ‡บ๐Ÿ‡ธ San Diego9.4
12๐Ÿ‡ฌ๐Ÿ‡ง London8.7
13๐Ÿ‡บ๐Ÿ‡ธ Miami8.5
14๐Ÿ‡ฆ๐Ÿ‡บ Adelaide8.2
15๐Ÿ‡ฌ๐Ÿ‡ง Bournemouth & Dorset8.0

For well over a decade now, Hong Kong has taken the top spot as the least affordable market globally. The only city to become even less affordable year over year was Los Angeles.

On the flip side, the most affordable city in the U.S. was Pittsburgh, with the median multiple sitting at 3.1. As people start to get priced out of certain markets, they may start to move to these more affordable cities.

Zooming out farther, here are the housing market affordability scores for all eight jurisdictions covered in this report:

Country / JurisdictionHousing Median Multiple
๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong18.8
๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand10.8
๐Ÿ‡ฆ๐Ÿ‡บ Australia8.2
๐Ÿ‡จ๐Ÿ‡ฆ Canada5.3
๐Ÿ‡ธ๐Ÿ‡ฌ Singapore5.3
๐Ÿ‡ฌ๐Ÿ‡ง UK5.3
๐Ÿ‡ฎ๐Ÿ‡ช Ireland5.1
๐Ÿ‡บ๐Ÿ‡ธ U.S.5.0

Again, none of these countries are considered affordable, but within each there is a wide range of scores. Hong Kong is significantly less affordable than the second-place New Zealand and third-place Australia.

Scores across Canada, Singapore, the UK, Ireland and the U.S., however, are quite similar.

Better Cities for Housing Market Affordability

While many people flock to big cities, evidenced by the fact that many of the least affordable places are also among the most populous, others are opting to live somewhere more in their price range.

Hereโ€™s a glance at some of the most affordable housing markets worldwide:

RankCityHousing Median Multiple
1๐Ÿ‡บ๐Ÿ‡ธ Pittsburgh, PA3.1
2๐Ÿ‡บ๐Ÿ‡ธ Rochester, NY3.2
3๐Ÿ‡บ๐Ÿ‡ธ Cleveland, OH3.5
3๐Ÿ‡บ๐Ÿ‡ธ St. Louis, MO-IL3.5
5๐Ÿ‡บ๐Ÿ‡ธ Cincinnati, OH-KY-IN3.6
5๐Ÿ‡บ๐Ÿ‡ธ Oklahoma City, OK3.6
7๐Ÿ‡บ๐Ÿ‡ธ Buffalo, NY3.7
8๐Ÿ‡บ๐Ÿ‡ธ Detroit, MI3.8
9๐Ÿ‡บ๐Ÿ‡ธ Louisville, KY-IN3.9
9๐Ÿ‡บ๐Ÿ‡ธ Tusla, OK3.9
11๐Ÿ‡จ๐Ÿ‡ฆ Edmonton, AB4.0
11๐Ÿ‡บ๐Ÿ‡ธ Hartford, CT4.0
11๐Ÿ‡บ๐Ÿ‡ธ Kansas City, MO-KS4.0
14๐Ÿ‡บ๐Ÿ‡ธ Columbus, OH4.1
14๐Ÿ‡บ๐Ÿ‡ธ Grand Rapid, MI4.1
14๐Ÿ‡บ๐Ÿ‡ธ Indianapolis, IN4.1
14๐Ÿ‡บ๐Ÿ‡ธ Minneapolis-St. Paul, MN-WI4.1
14๐Ÿ‡บ๐Ÿ‡ธ Philadelphia, PA-NJ-DE-MD4.1

All of the top 18 most affordable cities covered in the report are located in North America.

While big, global cities will certainly continue to attract talent and residents from all over, the more affordable cities may gain new residents for more practical financial reasons.

Continue Reading

Subscribe

Popular